Trump housing officials are questioning whether race-focused mortgage programs crossed the line under the Fair Housing Act
Wells Fargo is facing a federal fair-lending probe over nearly a decade of programs designed to lift Black homeownership. The case could show how aggressively the Trump administration plans to treat race-conscious mortgage lending as discrimination.
The Department of Housing and Urban Development (HUD) told Wells Fargo Chief Executive Charlie Scharf in a letter on Wednesday that it would review whether the San Francisco-based bank violated fair-lending laws by favoring Black and other minority borrowers, The Wall Street Journal reported.
The Journal reported that the letter alleges the bank pursued a strategy of "sorting" borrowers and tailoring products or terms by race.
Citing a senior official, the newspaper said HUD Secretary Scott Turner plans a full investigation of the bank's public statements, and that the agency is examining similar efforts at other lenders.
What did Wells Fargo commit to Black borrowers?
In February 2017, Wells Fargo pledged $60 billion in lending to create at least 250,000 African American homeowners by 2027.
It later backed a special purpose credit program (SPCP), a type of lending program authorized under the Equal Credit Opportunity Act to serve disadvantaged groups, with a $150 million commitment for Black borrowers.
The bank leaned further into that strategy with its 2023 decision to shrink home lending and focus on bank customers and minority communities.
"As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership," Kleber Santos, then CEO of consumer lending at Wells Fargo, said at the time.
Why does the Wells Fargo probe matter for mortgage brokers?
The investigation arrives as Washington dismantles the rules that once encouraged such programs.
Under the Consumer Financial Protection Bureau's April 2026 overhaul of Regulation B, race-based SPCPs run by for-profit lenders became impermissible for credit extended from July 21, though disparate-impact liability under the Fair Housing Act remained.
In August, seven agencies, including HUD and the Federal Housing Finance Agency (FHFA), rescinded the 2022 interagency statement that had reassured lenders such programs were lawful.
HUD is also moving to remove its own disparate-impact regulations under the Fair Housing Act, and has extended the public comment deadline on that proposal to October 9.
For brokers, the squeeze on these products started earlier. FHFA Director Bill Pulte ordered Fannie Mae and Freddie Mac in March 2025 to terminate the SPCPs they supported.
Wells Fargo has drawn fire from the opposite direction before. In 2022, Democratic senators pressed Wells Fargo over refinance approval rates for Black homeowners after a Bloomberg analysis found the bank had the lowest approval rate for Black homeowners among major US lenders in 2020.
The probe widens the administration's campaign against diversity, equity and inclusion (DEI) programs, which includes executive orders directing agencies to terminate discriminatory and illegal preferences.
Wells Fargo reports third-quarter results next week.
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